Last close As at 05/08/2026
GBP0.96
▲ 0.05 (0.05%)
Market capitalisation
GBP2,481m
Research: Real Estate
Primary Health Properties (PHP) has agreed to acquire Ireland’s first Enhanced Community Care (ECC) facility for a total consideration of €30m. With its interim results, PHP highlighted its continued plans for strategic expansion in Ireland, where higher yields support accretive investment in an expanding market. Alongside low-risk, value-creating asset management schemes and accelerating organic rental growth, this represents a key opportunity for continuing growth in income. Our forecasts are for now unchanged.
Primary Health Properties |
Strategic and accretive Irish expansion |
Irish acquisition |
Real estate |
13 September 2023 |
Share price performance
Business description
Analyst
Primary Health Properties is a research client of Edison Investment Research Limited |
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Primary Health Properties (PHP) has agreed to acquire Ireland’s first Enhanced Community Care (ECC) facility for a total consideration of €30m. With its interim results, PHP highlighted its continued plans for strategic expansion in Ireland, where higher yields support accretive investment in an expanding market. Alongside low-risk, value-creating asset management schemes and accelerating organic rental growth, this represents a key opportunity for continuing growth in income. Our forecasts are for now unchanged.
Year end |
Net rental income (£m) |
Adj. earnings* (£m) |
Adj. EPS** |
Adj. EPRA*** NTA/share (p) |
DPS |
P/NTA |
Yield |
12/21 |
136.7 |
83.2 |
6.2 |
116.7 |
6.20 |
0.81 |
6.5 |
12/22 |
141.5 |
88.7 |
6.6 |
112.6 |
6.50 |
0.84 |
6.8 |
12/23e |
149.9 |
90.1 |
6.7 |
111.5 |
6.70 |
0.85 |
7.1 |
12/24e |
154.4 |
91.9 |
6.9 |
111.6 |
6.90 |
0.85 |
7.3 |
Note: *Excludes valuation movements, amortisation of fair value adjustment to acquired debt and other exceptional items. **Non-diluted. ***Net tangible assets; adjusts for fair value of derivative interest rate contracts and convertible bond, deferred tax and fair value adjustment on acquired debt.
The property to be acquired has excellent environmental credentials and is fully let to the Health Service Executive (HSE) on a 25-year lease with five-yearly, compounded annually, Irish CPI reviews. It will provide a variety of services, primarily to support elderly care and those suffering from a variety of chronic diseases. The Irish ECC initiative is aimed at enhancing community-based health services and reducing pressure on hospital services. It is a €240m initiative with further opportunities for PHP, which has set a target of building its Irish portfolio to c €500m or c 15% of the total (from c €255m or c 8% of the total at H123), for which the January 2023 acquisition of Axis will provide meaningful support. Axis provides a permanent local platform from which to manage PHP’s Irish assets, now increased to 21, and has strengthened the company’s relationship with the HSE, for which Axis provides fit-out, property and facilities management.
In Ireland, as with the UK, the long-term need for primary healthcare facilities is driven by demographic trends and is relatively unaffected by economic conditions. However, compared with the UK, asset yields are higher and funding costs are lower. The terms of the acquisition have not been published, but the net initial yield for PHP’s existing Irish assets at end-H123 was 5.4% compared with the portfolio average of 4.9%.
In other recent announcements, PHP has said that it is in the process of applying for a secondary inward listing on the Main Board of the Johannesburg Stock Exchange, which it believes will enhance its international investor profile and trading liquidity in its shares. Additionally, it was announced that Mark Davies, a highly experienced executive, having held CEO and CFO roles in listed companies and private equity, will succeed PHP’s founder, Harry Hyman as CEO at the time of PHP's 2024 AGM.
Interim results showed that PHP is well on track to meet its fully covered 6.7p DPS target, the 27th consecutive year of growth.
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Research: Industrials
There are two key pillars to the investment thesis for Dowlais: achieving c 11% operating margins in the medium term and successfully navigating the electrification shift in the automotive sector. The interim results provide further evidence that the company is on track to deliver on both.